Have Tax Questions? Ask a Tax Expert for Answers ASAP

How JustAnswer Works:

Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.

Get a Professional Answer

Via email, text message, or notification as you wait on our site.Ask follow up questions if you need to.

100% Satisfaction Guarantee

Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax, Accountant

Category: Tax

Satisfied Customers: 3004

Experience: FCCA FCMA CGMA ACIS

75394688

Type Your Tax Question Here...

bigduckontax is online now

Hi...I have a question in Terms of average gross margins: lets

Customer Question

Hi...I have a question in Terms of average gross margins: let's say I have an online shop - and the people order a cushion (will be produced in India) - Price in India is 10 EUR + Shipping 1 EUR + Import Duty 3 EUR = 15 EU.. the item will be sold here in Germany for 30 EUR... The average gross margin is over 100% and i thought, if possible, it might be good to take some of the margin in another tax jurisdiction (such as switz, lux, malta or similar) to make more tax efficient in germany.Basically is there a way to have a third party (company) sitting between the buy and sell stages??

Well you can. For example that is how Amazon, Vodafone and Starbucks operate in the UK, invoicing from a tax haven to reduce their profits to a minimum level for UK Corporation Tax purposes. They use tax havens like Jersey, Gibraltar and the Turks and Caicos Islands. However operating in such havens doesn't come cheap, it is big business there. There may well be local directors mandatory, accountants, registered offices and legal charges to meet. For the big multi-nationals these are peanuts, but for smaller enterprises, the reverse is the case and profits quickly eaten up. There is also increasing pressure for such antics to be blocked in their original countries of operation and legislation may be planned to effect this.

Unless your business is really large you may find the costs of operating in tax havens outweigh any additional profits made by the tax avoided.

I feel an evening with a wet towel round your head and the backs of lots of envelopes are called for to work out whether the costs of such tax avoidance are worth the candle for your enterprise.

There you are, a general canter through the methods often used. I do hope I have shown you how tax is currently legally avoided through the use of tax havens and shed some light on your problem.

Ask a Tax Professional

Get a Professional Answer. 100% Satisfaction Guaranteed.

32 Tax Professionals are Online Now

Type Your Tax Question Here...

characters left:

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.